It has been weeks since I have published any new articles on health care reform.   I wanted to get out a general update out to those that read my interpretations.   It’s hard to latch on to a general theory or pattern since the House version was dead when it passed, and the Senate version changes more frequently than the weather.  


The popularity of health care reform has dropped to its lowest levels since it was first outlined early in the summer. There is an outside chance that it will not pass, but it is my opinion that some form of reform will pass.  Some of the changes are well intended but poorly executed.   The overriding reason that I believe that some form of reform will pass is because it is loaded with taxes in the first few years, which is good for the deficit, and the benefits are not set to kick in until the next Presidential term, leaving the next White House and/or Congress to take away benefits from the “poor and uninsured”.   I quotation the term because reform will not necessarily benefit the poor and uninsured, but you can count on anyone being cut from benefits as being defined as “poor or uninsured”.  


Health care reform should contain:

  • Cost containment provisions.
  • Penalties for those that try to beat the system.
  • Subsidies for those that can’t afford care, and then provide them with good CATASTROPHIC coverage, and a sliding scale of benefits for day-to-day expenses, based on income. 
  • Incentives and rewards for those that have played by the rules.   If you try and beat the system by not being insured, you are guaranteed insurance, but at higher costs than someone who has maintained coverage.  
  • Incentives to obtain lower cost coverage.  
  • Pre-ex elimination and guarantee to issue coverage. 
  • Elimination of Discounts based on membership.   As a consumer the cost of your service is based on your provider, not your insurer negotiated discount. 
  • Better Fraud control’s on Medicare. 

What I believe will be in the bill. 

  • No Cost Containment
  • Some disincentive for those that try and beat the system, but not enough to change the economic decision of the individual to choose to try and beat the system. 
  • $50 billion in new taxes to be passed on to the consumer. 
  • No reward for staying insured.
  • No incentive to obtain lower cost care.
  • Elimination of Pre-ex.
  • No change on provider discounts.  
  • A health insurance exchange to create new competition, but most likely won’t be competitive. 
  • “To heck with fraud”, lets just cut everybody.  (sarcasm) – The government can’t seem to manage fraud, or even mount an attempt.   They just will build in the basis that everybody cheats them, so cut everybody. 

I interpret the market reaction to be. 

  • Better access to coverage for those with pre-ex conditions, but at a higher cost to all. 
  • Less incentive for employer paid insurance.   
  • Higher costs from private insurers because of standardized benefit increases and guaranteed access.
  • Much higher costs for young males.  (As much as 100% higher for those under 35.)
  • Lower cost for people age 55 and over.   ( Due to price band implementation changes)
  • Greater burden for State Medicaid programs, which could result in some States dropping Medicaid for the poor forcing a Federal programs to provide coverage.   

In my opinion, the best option is to let the taxpaying and voting members of this society argue in public forum in 2010 what we collectively want.  Then each district can elect someone who represents one path or another, and we collectively come together to solve a serious problem.  

Have a Merry Christmas and Happy Holiday!